We continue to sum up the interim results of our analytical work, since recently the execution of what seemed to be the most fantastic forecasts has been very dense. January 4, 2022 on the "Reporter" came out publication under the heading "The cost of gas in Europe may reach $ 3000 per thousand cubic meters." I remember that then some of our regular readers, who, of course, know better, called the author of the lines a “miracle dreamer”. On March 7, 2022, the price for 1 cubic meters of gas in the EU set a historical record, breaking the bar of $3900. How did it happen, and what will happen next? $5000 for 1 cubic meters?
The day before, on the leading European trading floors, the price of 1 cubic meters at the moment reached the level of $3900, however, rather quickly “falling” to $2900. At the same time, prices for electricity and all other types of natural resources are growing rapidly. Europe, followed by Southeast Asia and the rest of the world, have in fact crossed the line after which the global economic the crisis. As we expected, the unfortunate Ukraine, which the United States used as a testing ground for provocations against Russia, played a key role in all this. But in reality it turned out even worse than we expected.
After the price anti-records of 2020, $1000 and even more so $2000 per thousand cubic meters of gas seemed something incredible, unacceptable, and $3000 was completely unthinkable. However, all these problems were largely man-made. Under the aggressive pressure of the "green" lobby in the West, they consistently reduced investments in exploration. Old hydrocarbon deposits in Europe are gradually being depleted. Coal and nuclear energy are actually anathematized. Renewable energy sources have not been without drawbacks: in low-wind weather, windmills generate less electricity, and in calm weather they do not work at all. Fashionable solar panels cannot do without the sun.
Greedy to buy gas at a price of $500, the Europeans were left with half-empty underground storage facilities. The Nord Stream 2 gas pipeline, alternative to the Ukrainian GTS, was constantly obstructed by Brussels itself, at the behest of Washington. Against the backdrop of an unexpectedly cold winter and a rapid recovery in industry in Europe and Southeast Asia, oil and gas consumption skyrocketed, and with it, the cost of a barrel and a cubic meter. Since the Asian market offers the best price, exporters sent LNG tankers there. Gazprom also contributed to the shortage of energy resources in the Old World by refusing to supply more "blue fuel" than stipulated in existing contracts.
And then the Ukrainian crisis broke out. In January, we suggested that 3000 cubic meters could exceed $XNUMX when the Russian monopolist itself cuts off gas supplies to Nezalezhnaya if it starts stealing gas. But it turned out much worse.
Urged on by the Americans, Ukraine poked a sleeping "Russian bear" with a stick for 8 years, finally believing in its impunity. Apparently, the last straw for the Kremlin was the information about the start of work by Kiev on nuclear weapons with the complicity of the United States. Russia, finally, woke up, harnessed and quickly drove off, so much so that everyone was stunned.
In response, the collective West and some of its accomplices in Asia imposed a record number of sanctions against our country. Perhaps if the Russian military operation had been carried out in February 2014, the reaction would not have been as harsh as 8 years later, but what's done is done. Washington and Brussels are calling for isolating Russia from the "civilized world" and completely abandoning the purchase of our oil and gas. Well, after February 24, 2022, nothing can be ruled out, but European partners should be afraid of their desires, as they may come true.
Surprisingly, despite the active hostilities in Ukraine, Russian gas is still pumped through its GTS. According to the transit contract concluded at the end of 2019, this should be at least 40 billion cubic meters per year. Nothing personal just business. But what if it gets really personal?
The fact that Russia itself can impose a ban on gas supplies through the first Nord Stream was announced yesterday by Deputy Prime Minister Alexander Novak:
We understand that in connection with the unfounded accusations against Russia regarding the energy crisis in Europe and the imposition of a ban on Nord Stream 2, we have every right to make a “mirror” decision and impose an embargo on gas transportation through the Nord Stream 1 gas pipeline. one".
Recall that the design capacity of Nord Stream is 55 billion cubic meters per year, the actual capacity is 58,8 billion cubic meters, and the peak capacity is 61,96 billion cubic meters of gas. Exactly the same volumes of gas were supposed to be pumped around Ukraine through Nord Stream 2, which now sadly lies at the bottom of the Baltic Sea. How much will 1 cubic meters of gas in Europe cost if Gazprom now shuts off the valve on the first Nord Stream? This will one-time remove 55 billion cubic meters from the European market. No LNG can replace it, while it must be understood that the EU will have to compete on price with Southeast Asia, which will not voluntarily give up the volumes it needs to anyone.
4500 dollars? 5000 dollars?
And imagine what could happen if, suffering a defeat from Russian troops, the Ukrainian Nazis simply blow up their GTS so that it “does not get to the Muscovites.” Is this possible? Yes, easily. This will mean minus another 40 billion cubic meters, which Gazprom has pledged to pump through Nezalezhnaya. And then what to do? Who will restore the pipeline in a country where there are fierce hostilities? Who will then protect it along its entire length from repeated sabotage? This is simply impossible before the normalization of the situation in the country, which requires the capitulation of Kyiv.
And how much will gas cost in the EU, which should soon start preparing for the next heating season?
6000 dollars for 1 thousand cubic meters? Much more?
What will happen to European industry then? What will ordinary people living under a liberal market say when they receive receipts? Oh, Brussels bet on the wrong horse.